Hayleys PLC records Rs. 52.6 b turnover in a challenging first quarter

Hayleys PLC, Sri Lanka’s most diversified conglomerate, demonstrated resilience in challenging conditions to record an improvement in turnover and operating performance during the first quarter of the 2019/ 20 financial year, the company said this week.

According to the group’s results posted on the Colombo Stock Exchange website, the pre-tax profit fell by 64 per cent to Rs. 285 million from Rs.798 million in the previous 2018/19 quarter. The group reported a post-tax loss of Rs. 73 million versus a profit of Rs. 260 million in previous, corresponding quarter.

Group turnover grew by 4 per cent to Rs. 52.6 billion during the period, upheld mainly by the top line growth in Hand Protection (+ 10 per cent), Purification (+24 per cent) and Textiles (+41 per cent) sectors. Consolidated earnings before interest, tax, depreciation and amortisation ( EBITDA) also increased by 5 per cent to Rs. 4.6 billion during the period while consolidated operating profit grew by 4 per cent to Rs. 3.3 billion. High finance cost resulted in decline of the consolidated pre- tax profit to Rs. 285 million, Hayleys said in a media statement.

In terms of segmental operating performance, Textiles (+ 327 per cent), Purification (+84 per cent) and Eco Solutions (+ 32 per cent) were the most significant contributors to profit growth. Consumer and Re t a i l , Transportation and Logistics, Power and Energy, Hand Protection and Agriculture sectors have also remained major contributors to the consolidated operating profit as in the previous periods. The performance of the Leisure sector was significantly impacted by the April 21 terrorist attack which directly affected The Kingsbury Hotel and the subsequent decline in tourist arrivals into Sri Lanka due to adverse travel advisories. Resultantly, the Leisure sector generated an operating loss of Rs. 364 million, negatively impacting consolidated profitability.

Subdued consumer sentiments affected the performance of the group’s Consumer and Retail sector which saw operating profits declining by 13 per cent during the quarter.

“The diversity in the group’s operations continue to enable Hayleys to withstand challenges stemming from the operating landscape” said Mohan Pandithage, Chairman and C EO of Hayleys PLC.

“We are encouraged by the faster than expected recovery of the country’s tourism sector and are hopeful of a strong winter season this year. We also anticipate interest rates to decline over the short- tomedium term, supporting earnings expansion,” he said.

We are encouraged by the faster than expected recovery of the country’s tourism sector and are hopeful of a strong winter season this year